Facebook's digital currency project, Diem is expected to launch stablecoin against the US dollar developed by the Diem Association later this quarter.
Basically, stablecoin depends on fiat or gold currency, making its value more practical as payment because it is different from other cryptocurrencies.
The Libra project was first proposed in June 2019. However, some giant firms such as Visa and Mastercard withdrew due to weaknesses in data privacy records, misappropriation of funds and risks to global financial stability, making the project the focus of legal supervisors worldwide.
Finally, Facebook canceled its launch in 2020 and focused on stablecoins that are ‘tied’ to the local currency, starting with the US dollar.
Various reforms have been made to make a difference with Facebook. Among them; Diem membership consists of financial partners and innovators such as Shopify and crypto firms such as Coinbase and Xapo. Facebook is no longer a member of the Diem project, instead it will be represented by its subsidiary, a digital wallet connected to Diem, Novi.
Not only that, Diem will operate under strict control which if any firm wants to use the payment system, they have to go through the onboarding process to become a member of the Diem Association.
The Diem payment system also allows stablecoin to be converted to fiat to facilitate payment transactions at any retailer that does not accept stablecoin.
For now, Diem is waiting for a payment system license from the Swiss financial supervisor, FINMA which once approved, stablecoin can be fully launched.
